The first group of three essays focuses on China’s expanding relationships in Latin America and the Caribbean. All three were first published by The Carter Center as part of the China Research Center and The Carter Center’s joint organization of the Sixth Annual Meeting of the International Consortium for China Studies. We are delighted to have received permission to reprint condensed versions of the originals. Enrique Dussel Peters provides an overview of China’s economic relations with Latin America and the Caribbean, with a particular emphasis on the growing geopolitical competition with the United States. Haibin Niu offers suggestions about how China and Latin American nations might forge productive, cooperative relations going forward. Margaret Myers and Rebecca Ray outline the Trump administration’s decidedly negative view of China’s economic interactions in Latin America and the Caribbean.

The next two articles examine other aspects of trade and economic cooperation. Penelope Prime, our managing editor, analyses the state of the U.S.-China trade war in a piece first published by The Conversation. Just in case you’re thinking the deal signed in mid-January signals and end to the trade war, Dr. Prime has five words for you: “Don’t get your hopes up.” Mariel Borowitz looks at a little-known aspect of China’s rise to global prominence: data collection from space. Borowitz reports that China is sharing data widely, especially with countries involved with Belt and Road initiatives.

We offer Dr. Fei-ling Wang’s introduction to an Al Jazeera documentary that takes a deep look at the rise of China. Dr. Wang, a China Research Center associate, was featured prominently in the film.

Finally, Li Qi, also a Center associate, offers a personal essay that reflects on her daughter’s experience as a 6-year-old attending a Chinese elementary school in Beijing. There’s much to ponder here about the value of testing and the contrasts between the approaches to assessment taken in China and the United States.

It’s an eclectic mix that reflects the multifaceted face of China today. We hope you find each one of the pieces thought provoking.

The post Introduction appeared first on China Research Center.

Since the beginning of the 21st century, China’s presence in Latin America and the Caribbean (LAC) has been substantial in practically all socio-economic fields: cultural, bilateral, and multilateral political issues, as well as trade, foreign direct investments, academic exchanges, and other areas. The main objective of this essay is to analyze the effects of China’s presence in the region in terms of sustainable and long-term development. I will include a diagnostic to understand some of the specificities of the LAC-China socioeconomic relationship, followed by the conclusion with a series of proposals.

The first section of the paper will examine four issues that are relevant to understanding general and specific topics about the China-LAC relationship:

1. China’s increasing geopolitical competition with the U.S. in LAC.
2. China’s proposal of a globalization process;
3. Particular developments and structures in trade, foreign direct investment, financing and infrastructure; and
4. The institutional framework between LAC and China.

The second part of the paper focuses on the concept of “new triangular relationships” and LAC’s challenges given increasing tensions between the United States and China.

Four Topics to Understand the Current China-LAC Relationship

Since the beginning of the 21st century, there has been a qualitative change in China’s global presence, including in LAC. While it is true that China is still a developing country in terms of GDP per capita and other socioeconomic indicators, the size of its population and of its economy, along with its medium- and long-term initiatives, have all allowed China to become a serious global competitor to U.S. hegemony. From an LAC perspective, it is true that the U.S. is still by far the most important “qualitative” actor in the region, with long historical ties with the regional elites, militaries, and academics, and plays an important role in cultural terms. It is also true that China is increasing its presence in LAC, with or without diplomatic ties. Less than a decade ago Chinese scholars argued that China would respect the U.S.’s “backyard” (Wu 2010). Since then, however, China’s presence has not only increased in socioeconomic terms (as we shall see below), but it has also emerged as an additional actor breaking the duopoly of the European Union and U.S. presence in the region. China has become an additional point of reference in terms of economy, culture, education, and even in military terms, such as in the case of Venezuela (Koleski and Blivas 2018).

China’s proposal of a globalization process with Chinese characteristics.

China’s increasing global presence in the context of profound domestic social, economic, and political reforms since the 1970s has also been reflected in the increase of Chinese activities and responsibilities in the United Nations Security Council, in the acknowledgement of China’s relevance in the international financial system through its membership in 2016 and inclusion of the renminbi as part of the Special Drawing Rights (SDR), and by its increasing leadership at the G20. From this international perspective, the launch of the Belt and Road Initiative (BRI) at the end of 2013 is crucial to understanding China’s proposal and ambition of a globalization process with Chinese characteristics. The BRI is China’s key international cooperation strategy with countries in Asia, Africa, Europe, and Latin America since January of 2018, when China formally recognized Latin America at the CELAC-China Forum, specifically through five areas of cooperation: policies, roads and highways, trade, currency, and people-to-people (Long 2015). The BRICS countries (Brazil, Russian Federation, India, China and South Africa) New Development Bank (NDB), as well as the Asian Investment and Infrastructure Bank (AIIB) are some of the new powerful instruments of this global strategy.

The conclusions of the XIX National Congress of the Communist Party of China (CPC) at the end of 2017 and the two CPC sessions in 2018 are relevant to these initiatives (Anguiano Roch 2018, 2019). They not only emphasize a long-term socialist development of China for 2035 and 2050 and elevate Xi Jinping’s thought as part of the CPC, but they also underline the importance of BRI as part of the domestic and global strategy of China. After the Second BRI Forum in April of 2019, 130 countries had joined the BRI (Belt and Road Portal 2019), 17 from LAC. The Asian Infrastructure Investment Bank (AIIB), on the other hand, accounts for 70 members, including 44 regional members and 26 non-regional members, plus 27 prospective members (six regional and 21 non-regional).

As part of these strategies, China has signed an increasing number of trade agreements and today has 10 free trade agreements, including those signed with Chile, Costa Rica, and Peru, in addition to the agreements with the Special Administrative Region of Hong Kong and Macao, as well as negotiations with Pakistan and Israel. From an Asian regional perspective, China has been also leading efforts within the Asia-Pacific Economic Cooperation (APEC) and the Association of Southeast Asian Nations (ASEAN). However, in recent years China has prioritized the Regional Comprehensive Economic Partnership (RCEP) with 16 member countries, including the Philippines, Japan, Korea, Australia, India, and Vietnam. So far, no LAC country participates in that initiative.

China has proposed a group of specific initiatives toward LAC. On the one hand, the Chinese public sector published two “White Books” for LAC in 2008 and in 2016 (GPRC 2011, 2017). They integrate a group of issues relevant for this analysis, including 13 priorities on economic and trade topics (GPRC 2017:7-11), among them: the promotion of trade in high-value-added products and with high technological content, cooperation in industrial investment and productive capacity, cooperation in infrastructure and in manufacturing, and cooperation between chambers and institutions to promote trade and investment (GPRC 2017:9). Interestingly, the 2016 White Book states that Chinese firms should “promote linking the productive capacity with quality and advantaged equipment from China to the necessities of the countries of LAC to help them in improving their development capacity with sovereignty” (GPRC 2017:7) and to enhance infrastructure projects and public-private partnerships “in transport, trade logistics, storage installations, information and communication technologies, energy and electricity, hydraulic works, urbanism and housing, etc.” (GPRC 2017:8) China also focuses on cooperation in the manufacturing sector to “establish lines of production and sites for the maintenance of construction material, of nonferrous metals, machinery, vehicles, communications and electricity equipment, etc.” (GPRC 2017:9)

More relevant in the specific context of Chinese proposals of cooperation with LAC is Xi Jinping’s cooperation scheme “1+3+6,” which stands for: 1 plan (CELAC’s Cooperation Plan for 2015-2019), 3 driving forces (trade, investment, and financial cooperation), and 6 key fields of cooperation (energy, resources, infrastructure projects, manufacturing, scientific innovation, and technical innovation). The CELAC-China Forum Cooperation Plan for 2015-2019 includes a wide range of tools for cooperation in politics, culture, education and economic issues, among others. It also includes enhancing micro, small and medium firms, financial institutions, infrastructure and transportation, industry, science and technology, as well as specific sectors such as the aeronautics, information and communication industries. The plan also makes explicit reference to the “joint construction of industrial parks, science and technology, special economic zones and high-tech parks between China and CELAC member states, with the goal to improve industrial investments and the generation of industrial value chains” (CELAC 2015:4). Those initiatives will be accompanied by several forums and funding options, including the Forum on Development and Industrial Cooperation China-LAC, the Fund for China-LAC Cooperation, the Special Credit for China-LAC Cooperation, and other options according to the cooperation priorities. Most of these instruments, as well as new ones, were renewed in the Working Program of the China-CELAC Forum (CELAC 2018).

In this context, China’s presence in the region has been highlighted and criticized from a number of different perspectives, notably using the argument of a “debt trap” and environmental challenges.

China’s Socioeconomic presence in LAC.

The LAC-China socioeconomic relationship since the beginning of the 21st century can be understood as a series of four phases (Salazar-Xiranachs, Dussel Peters, and Armony 2018):

1. The stage that starts in the 1990s with a rapid intensification of the trade relationship and China becoming LAC’s second trading partner;
2. The stage of 2007-2008, parallel to the global financial crisis, during which China became a major regional financial source for LAC;
3. In the same period (2007-2008) China also became a very important source for overseas foreign direct investment (or Chinese OFDI); and
4. The stage starting in 2013, in which China is developing massive infrastructure projects in the region, also as part of a series of Chinese global initiatives.

Increased trade between China and LAC.

At least four topics are relevant in this area:

1. China’s share in LAC’s trade increased from less than one percent in the 1990s to 14.08 percent in 2017, and China has been LAC’s second trading partner since 2013, displacing the European Union. In addition —  and a topic that has received little attention so far — LAC has increased its share in China’s trade becoming China’s second trading partner, moving from less than four percent in the 1990s to 9.52 percent in 2017, second only to the U.S.
2. LAC’s trade with China is characterized by an increasing trade deficit — above $80 billion since 2012. These trends are a result of the disaggregated composition of trade. LAC’s main three import goods (according to the Harmonized Tariff System) from China — automobiles, electronics, and auto parts — have increased significantly their share over total imports, from 26.67 percent in 1990 to 38.63 percent in 2000 and 56.85 percent in 2017. LAC’s exports to China are significantly more concentrated. LAC’s main three export goods — soya, minerals and copper — account for at least 65 percent of total exports since 2007.
3. The specific content of LAC-China trade is critical. The content of LAC imports and exports from/to China differs dramatically by its technological share. While LAC’s share of medium and high technological exports to China account for less than five percent of total exports in the last decade, imports from China accounted for more than 60 percent. Trade figures with the United States show that LAC’s trade has not only closed its gap in terms of medium- and high-technology goods, but has achieved substantial results, exporting more medium- and high-tech goods than it imported.
4. The U.S. has been the main loser as a result of increasing competition between China and the U.S. in LAC’s imports. During 2000-2017, the U.S. share of LAC’s trade fell from 53.57 percent to 40.76 percent, while China’s increased from 1.72 percent to 14.08 percent (Dussel Peters 2016). The decline of U.S. exports to LAC has generated an annual loss estimated at around 840,000 jobs, particularly in manufacturing and the auto parts-automobile global commodity chain (Dussel Peters 2015).

China’s OFDI in LAC.

A series of recent studies on Chinese outward foreign direct investment (OFDI) in LAC highlights regional and national characteristics. Some case studies include analysis of particular areas of the global value chains and firms (Dussel Peters 2014; Jiang 2017), with methodological and statistical differences between international, Chinese, and Latin American sources (Ortiz Velásquez 2016). With these relatively detailed discussions on LAC and China in mind, the Monitor of China’s OFDI in LAC (Dussel Peters 2019) provides the following trends for 2001-2018:

1. The People’s Republic of China has issued methodological regulations to record the final destination of OFDI (MOFCOM, NBS and SAFE 2015). Such regulations, however, have not yet resulted in the official statistics to record Chinese OFDI.
2. Total Chinese OFDI fell in 2018 for the second year in the last decade, as well as to LAC (from 31 percent to eight percent in 2018) and represented 51.66 percent of 2016.
3. Chinese firms invested $121.7 billion from 2000 to 2018 in 402 transactions that generated 324,096 jobs, particularly during the most recent period 2010-2018.
4. Recent results on China’s OFDI include an increased share of mergers and acquisitions (M&A) (72.2 percent in 2017 and 74.8 percent in 2018), and they show an increased diversity of China’s OFDI, particularly in services and manufacturing (in 2010-2018). For example, raw materials’ share of total OFDI in LAC accounted for only 36.2 percent of total OFDI, and the increased share of private OFDI within the total OFDI, from 29.8 percent during 2000-2018 to 93.7 percent in 2018.

Disaggregating by country, China’s OFDI also reflects interesting recent changes, including increased diversification in target countries, with an increased presence in Chile and Peru, while the share and absolute value of Chinese OFDI to Argentina, Brazil, and Mexico fell substantially in 2018.

China as a major source of financing for LAC since 2007-2008.

A group of authors and institutions, particularly Kevin Gallagher at the Global Economic Governance Initiative (GEGI), have contributed substantially through transaction and country-level analysis, with comparisons on the conditionality of financing, as well as national and sectorial distribution of financing (Gallagher, Irwin and Koleski 2013; Gallagher 2016; Myers and Gallagher 2019; Stanley 2013). In general, China’s financing to LAC during 2005-2018 has been highly concentrated. China Development Bank and Exim Bank have provided more than $140 billion. Most resources in 2018 were channeled to Venezuela, focusing significantly on infrastructure projects. As with OFDI trends, however, Chinese finance to LAC has fallen substantially in 2017 and 2018.

The RED ALC-China (Dussel Peters, Armony and Cui 2018) has provided a detailed analysis and discussion of Chinese infrastructure projects in LAC. The presentation of firm-level statistics and analysis of case studies in several countries results in a wide range of experiences and policy suggestions at the firm and sector level. Until 2017, China had pursued 69 infrastructure projects in LAC, accounting for more than $56 billion and generating more than 214,000 jobs in the region. Argentina, Venezuela, Ecuador, and Brazil have had the most Chinese infrastructure projects in the region, while other countries in Central America and Mexico have, so far, received fewer.

The more qualitative and case study work of Dussel Peters, Armony, and Cui (2018) reflects the pragmatism of Chinese firms through infrastructure projects in the region and the ability to operate in very different labor conditions, subcontracting networks and relations with clients depending on each country’s context. In several cases the same Chinese firms — all of them public firms — generate very different conditions in different countries of the region. In some cases, Chinese firms are able to subcontract all major civil engineering segments of the projects to local and national firms, and subcontract with local suppliers for major segments of the respective infrastructure projects. Workers and working conditions are thus generated by local firms. In several cases, the employees do not know they are working for a Chinese infrastructure project. In other cases, the totality of the project is run by Chinese firms, including the design of the project, financing, subcontracting, workers, engineering activities, construction, and post-construction services. While Chinese firms have the ability to offer these “turnkey projects,” in most cases it depends on the specific conditions of the host country. The involvement of local and domestic firms, workers, and specialized activities, and particularly the contracts defined and accepted by host countries, may in some cases even allow for learning processes and technology transfer. Development, from this perspective, is highly dependent on the host country and government that proposes and signs these contracts. A rather small group of Chinese public firms are the core of these infrastructure projects in the region.

Weak and insufficient institutions in LAC, China, and the U.S. on the LAC-China relationship.

Rather surprisingly, while socioeconomic and political relations between China and LAC have increased dramatically, public, private, and academic institutions working on China in LAC and LAC in China, as well as bilateral institutions between China and specific LAC countries and in the U.S., have not reflected the same dynamism. In general, there is a wide gap between public, private, and academic institutions analyzing the China-LAC relationship both in LAC and in China and socioeconomic growth (Arnson et. al 2014; Dussel Peters and Armony 2015). Beyond the fashion of studying the China-LAC relationship, in general, there are many authors and institutions in LAC, China, and the U.S., including think tanks, that do not review the massive, albeit insufficient, literature in China and Latin America and the Caribbean of the last four decades. WÅith few exceptions, such as the Consejo Empresarial Brasil-China (CEBC), the Institute for Latin American Studies of the Chinese Academy for Social Sciences (ILAS/CASS), the China Institutes of Contemporary International Relations (CICIR), the Center for Chinese-Mexican Studies (CECHIMEX) at UNAM, and the Academic Network of Latin America and the Caribbean (RED ALC-China), the institutional analysis in the public, private, and academic sector is weak, with few attempts to develop a qualitative learning process beyond the institutional competition, and those based on the existing analysis in LAC and China. The best example of the existence of these limited institutions is the CELAC-China Forum (Cui and Pérez 2016). Its presidency rotates annually, it lacks a technical secretariat, and it depends annually on a different ministry of foreign affairs from an LAC country. As a result, the learning process in terms of analysis and proposals is weak, the technical and qualitative learning process is limited, and so are the implementation, evaluation, and proposals on very specific items discussed and proposed by the CELAC-China Forum since 2015.

Looking to the future: a new triangular relationship.

Acknowledging these trends along with the concept of “New Triangular Relationships” (Dussel Peters, Hearn and Shaiken 2013) is critical for LAC today. The region and each of its countries, with no exception, has to understand, deal with and negotiate within this “new triangle.” In some cases, the presence of the U.S. is still very strong, such as in the Caribbean, Mexico, and Central America. In others, the presence of China is considerable, such as in Cuba and Venezuela. Nevertheless, in all cases LAC countries must consider increasingly difficult strategies in their foreign relations given the increasing tensions between China and the U.S.  None of the LAC countries can exclude the U.S. or China as important strategic partners. New governments (such as in Argentina and Brazil) have attempted to distance themselves from China recently, with little success. Venezuela, on the other hand, until the recent crisis still had substantial economic linkages with the U.S.

From this perspective, many countries in LAC are at a crossroads and in the middle of the U.S.-China competition. Vice President Mike Pence (2018) highlights: The U.S. will be “heightening our scrutiny of Chinese investment in America to protect our national security from Beijing’s predatory actions.” … “A new consensus is rising across America …” and putting enormous pressure on countries worldwide, including LAC. In 2017 and 2018, three LAC countries — Dominican Republic, El Salvador, and Panama — established diplomatic relationships with China. In response, the U.S. in September 2018 recalled its top diplomats from all three countries and threatened 17 additional countries that still have diplomatic ties with Taiwan, mainly in Central America, the Caribbean, and the Pacific, proposing new legislation in the Senate to “downgrade U.S. relations with any government that shifts away from Taiwan, and to suspend or alter U.S. assistance” (Reuters 2018).

The situation is particularly stressful for countries in LAC that are geographically close to the U.S., such as Mexico and those in Central America, with long historical, political, and economic ties with the U.S. and that are experiencing an increasing presence of China. In the case of Mexico, the renegotiation of the North American Free Trade Agreement in 2018 has led to the signing of the United States-Mexico-Canada Agreement, or USMCA, which still has to be ratified by the legislatures of the respective countries and includes an “Anti-China chapter” (chapter 32.10) that practically prohibits free trade agreements with China (as a “non-market economy”) (Dussel Peters 2018).

Acknowledging the potential risks of their relationships with either China or the U.S., LAC countries might find themselves in the future under strong pressure to choose sides. However, that would make little sense from an LAC perspective given the presence of both powers in all countries of the region.

Works Cited

Anguiano Roch, Eugenio. 2018. “El 19 Congreso Nacional del Partido Comunista de China”. Cuadernos de Trabajo del Cechimex 1, pp. 1-24.

Anguiano Roch, Eugenio. 2019. “La Iniciativa Una Franja-Una Ruta: evolución visible”. Ciclo de Conferencias del Cechimex, April 4th.

Arnson, Cynthia, Jorge Heine and Christine Zaino (edits.). 2014. Reaching Across the Pacific: Latin America and Asia in the New Century. Washington, D.C.: Woodrow Wilson Center.

CELAC (Community of Latin American and Caribbean States). 2015. Cooperation Plan (2015-2019). CELAC, Beijing.

CELAC. 2018. Plan de Acción Conjunto de Cooperación en Áreas Prioritarias CELAC-China (2019-2021). Santiago de Chile: CELAC.

Cui, Shoujun and Manuel Pérez García. 2016. China and Latin America in Transition. Policy Dynamics, Economic Commitments, and Social Impacts. Beijing: Springer.

Dussel Peters, Enrique (coord.). 2014. La inversión extranjera directa de China en América Latina: 10 estudios de caso. México: Red ALC-China, UDUAL y UNAM/Cechimex.

Dussel Peters, Enrique. 2015. Testimony before the Joint Subcommittee Hearing of the Committee on Foreign Affairs, Subcommittee on the Western Hemisphere and Subcommittee on Asia and the Pacific, US States House of Representatives, September 10^th.

Dussel Peters, Enrique (coord.). 2016. La nueva relación comercial de América Latina y el Caribe con China, ¿integración o desintegración comercial? México: Red ALC-China and UNAM/Cechimex.

Dussel Peters, Enrique. 2018/a. Comercio e inversiones: la relación de Centroamérica y China ¿Hacia una relación estratégica en el largo plazo?. Ciudad de México: CEPAL, Sede Subregional en México.

Dussel Peters, Enrique. 2018/b. “The New Triangular Relationship Between Mexico, the United States, and China: Challenges for NAFTA”. In, Dussel Peters, Enrique (coord.). The Renegotiation of NAFTA. And China? Mexico: Red ALC-China, UDUAL, and UNAM/Cechimex, pp. 87-99.

Dussel Peters, Enrique. 2019. Monitor of Chinese OFDI in Latin America and the Caribbean 2018. Red ALC-China: Mexico.

Dussel Peters, Enrique, Ariel C. Armony and Shoujun Cui (coord.). 2018. Building Development for a New Era. China´s Infrastructure Projects in Latin America. Mexico: Red ALC-China and University of Pittsburgh.

Dussel Peters, Enrique, Adrian H. Hearn, and Harley Shaiken. 2013. China and the New Triangular Relationship in the Americas. China and the Future of US-Mexico Relations. Mexico: University of Miami/CLAS, University of California Berkeley/CLAS and UNAM/CECHIMEX.

Gallagher, Kevin. 2016. The China Triangle: Latin America´s China boom and the fate of the Washington Consensus. Oxford University Press: Boston.

GPRC. 2017. “Documento sobre la Política de China hacia América latina y el Caribe”. Cuadernos de Trabajo del Cechimex 1, pp. 1-12.

Jiang, Shixue. 2017. “La inversión china en América Latina y el Caribe: características, mitos y prospectos”. In, Pastrana Buelvas, Eduardo y Hubert Gehring (coord.). La proyección de China en América Latina y el Caribe. Editorial Pontificia Universidad Javeriana: Colombia, pp. 267-292.

Koleski, Katherine, and Alec Blivas. 2018. China´s Engagement with Latin America and the Caribbean. Washington D.C.: U.S.-China Economic and Security Review Commission.

Long, Guoqiang. 2015. “One Belt, One Road: A New Vision for Open, Inclusive Regional Cooperation”. Cuadernos de Trabajo del Cechimex 4, pp. 1-8.

MOFCOM (Ministry of Commerce), NBS (National Bureau of Statistics) and SAFE (State Administration of Foreign Exchange). 2015. Statistical Registry Procedure OFDI. Beijing: MOFCOM, NBS and SAFE.

Myers, Margaret, and Kevin Gallagher. 2019. Cautious Capital: Chinese Development Finance in LAC, 2018.Washington, D.C.: Inter-American Dialogue and Global Development Policy Center.

Ortiz Velásquez, Samuel. 2016. Methodological Differences in Chinese OFDI. Monitor de la OFDI China in LAC. Red ALC-China: Mexico.

Reuters. 2018. “U.S. recalls diplomats in El Salvador, Panama, Dominican Republic over Taiwan”. Reuters, September 7.

Salazar-Xirinachs, José Manuel, Enrique Dussel Peters, and Ariel C. Armony (edits). Efectos de China en la cantidad y calidad del empleo en América Latina (2000-2018). Lima: OIT.

Stanley, Leonardo. 2013. “El proceso de internacionalización del RMB y el nuevo protagonismo del sistema financiero chino”. In, Enrique Dussel Peters (edit.). América Latina y el Caribe – China. Economía, comercio e inversiones. México: Red ALC-China, UDUAL and UNAM/CECHIMEX, pp. 147-169.

Wu, Hongying. 2010. “Has Latin America Become China´s Backyard?”. Contemporary International Relations 19(3), pp. 16-26.

The post China’s Recent Engagement in Latin America and the Caribbean: Current Conditions and Challenges appeared first on China Research Center.

An Emerging Development Partnership

Latin America’s ties to China are characterized by their economic dimensions instead of the fully-fledged ties between the region and the United States. The economic agenda has taken a high profile in the Sino-Latin American relationship since the establishment of the China-Brazil strategic partnership in 1993. The most visible achievements of the strategic partnership are economic in nature. For example, China surpassed the United States as Brazil’s largest trade partner in 2009. Additionally, China and Brazil are founding members of the newly established multilateral investment banks such as the New Development Bank (NDB) and the Asian Infrastructure Investment Bank. China’s Free Trade Agreements (FTAs) with Chile, Peru, and Costa Rica clearly show the primacy of the economic agenda in the relationship. China’s economic growth strategy is to integrate itself into the world economy, and Latin America is an increasingly important partner for China, and vice versa.

This is not to say that political, cultural, and military exchanges between China and Latin America are not important, but other dimensions are overshadowed by this prominent economic linkage. In the context of this deepening economic relationship, both sides are engaging with each other on other dimensions such as culture, politics, and security. While the relationship is supported by economic ties, it needs to become more comprehensive and sustainable in order to continue to develop. To achieve this goal of a stronger relationship, China has strengthened its political will and increased the amount of economic resources in order to support its overall relationship with the region.

There are some new features of this prominent economic linkage. Firstly, the economic ties are going beyond the initial trade dimension. China is the largest trade partner for Brazil, Peru, and Chile. China is also an increasingly important creditor and investor for the region’s various economic sectors. Research by Inter-American Dialogue and Boston University found that Chinese state-to-state finance has exceeded the sovereign lending from the World Bank and the Inter-American Development Bank (IDB) since 2005.[1] Secondly, China is pursuing economic ties in a sustainable manner by paying more attention to infrastructure, innovation, and renewable energy, which is mainly achieved via China’s diversified investment in the region. Thirdly, the economic ties are used by both sides to build a kind of solid development partnership. Both China and regional countries are treating their economic ties from a perspective of not only commercial interests, but also development opportunities. An important indicator in this regard is the increasing number of countries from the region that are joining the Belt and Road Initiative, designed by the Chinese leadership as a platform for international cooperation.

All these new features are happening in the context of China’s gradual rise. In the past, China and Latin America were highly dependent on the advanced economies. In the long period after China initiated its reform and opening up process in the late 1970s, China’s main economic partners were developed economies who could offer China much-needed capital, technology, management, and export markets. Latin America also depended on advanced economies and was a low priority region for China in the last century because it didn’t have the capital, technology, or management skills China needed. Without China’s rise within the international economic system, it would have been impossible to build such a dynamic development partnership with a region that is geographically remote from China.

From a perspective of domestic and external nexus, China’s projection in Latin America is always influenced by the strategic environment of the international system. Historically, China’s interaction with Latin America was quite loose since China lacked the capacity and intention to project its presence into Latin America. The famous maritime silk road (1565-1865) between China and Mexico was mainly conducted by European traders, and trade relations between China and Mexico were connected via the European-controlled Philippines. In the 19^th century, thousands of Chinese migrants were traded to Latin American countries by European colonists. These Chinese laborers contributed greatly to railway and canal construction. They also became the targets of racist attacks, prompting the Qing dynasty to deploy a warship to the region in 1911.[2]

After the establishment of the PRC in 1949, China’s major external relationship was concentrated on the Soviet Union group for a long period because of the blockade imposed by the Western countries. China’s interaction with Latin America during that period mainly happened in the cultural and economic sectors. China’s intentions in Latin America during that period were also questioned by some regional countries because of their domestic communist activities. The establishment of the China-Cuba diplomatic relationship in 1960 also fit the Soviet Union-U.S. bipolar power structure. The China-Cuba relationship suffered from the Moscow-Beijing rivalry through 1970s and 1980s until the normalization of the Soviet Union-China relationship in the late 1980s. China’s booming diplomatic relationship with Latin America came about in the 1970s in the context of the improved Sino-U.S .relationship and China’s return to the United Nations as a permanent member of the Security Council. From this geo-strategic perspective, some scholars argue that China’s foreign policy toward Latin America has been primarily driven by a one-dimensional concern: global geopolitics from a historical perspective.[3] In general, the bipolar world power structure constrained the potential of the China-Latin America relationship.

It is fair to say that a substantial relationship with Latin America became possible only when both China and Latin America could act as independent players on the global stage. Even when China implemented its famous opening up policy in 1978, it took at least two decades for China to have the capacity to engage substantially with remote developing regions such as Africa, the Middle East, and Latin America. China’s growing economic capacity and strategy to integrate itself into the world economy are what allowed China to build a substantial relationship with Latin America. Therefore, it was at the start of the 21^st century that a substantial economic trade relationship began to emerge between China and Latin America as China integrated itself into the global value chains. During this time, Latin America mainly provided raw materials to China as China developed into a world-class manufacturing center. Later, China’s sizable emerging middle class’s growing domestic demands, accumulated capital, management and technology, and increasingly capable “going global” enterprises began to be new major drivers of China’s economic ties with Latin America. China’s social dynamism includes a significant population of 700 million that left poverty in recent years; its increasing demands for meat, dairy, cereal, and soy products were very attractive for the region’s agricultural sector.

In 2016, China became the second-largest source of outward Foreign Direct Investment (FDI) for the first time, and its FDI outflows were 36% more than the amount of its inflows. China remained the largest investor in the least developed countries (World Investment Report 2017). The importance of China for the developing world including Latin America and the Caribbean (LAC) was well recognized by international organizations.[4] In its 13th Five-Year Plan (2016-2020), China set some important goals regarding the developing world. They include the goal of reaching a volume of trade in services that accounts for at least 16% of total foreign trade, establishing overseas production centers and cooperation zones for major commodities, and encouraging international cooperation on production capacity and equipment manufacturing. China will promote opening up of capital markets and encourage Chinese financial institutions to increase their overseas presence. China’s transition from world factory to innovation center will also affect its economic relationship with the rest of the world. In the future, Chinese investments will focus on more advanced and value-added industries.

The rise of China is a new reality for Latin American countries when they think of the future. Since the beginning of this century, most Latin American countries turned their eyes to East Asia and especially to China for commerce and trade opportunities. They were trying to engage with China bilaterally and multilaterally. The agenda with China goes beyond economic areas to global issues such as climate change, fighting poverty, etc. China also treated Latin America as an important region in the global system. With this vision in mind, China built many types of strategic partnerships with individual countries from the region and coordinated with regional countries in international forums such as APEC, BRICS, and the United Nations. To facilitate cooperation with the whole region, China initiated the China-CELAC Forum. Latin American countries were also invited to join the Belt and Road Initiative, which is a flagship initiative of the Chinese government led by President Xi Jinping.

Challenges for the Future

In deepening cooperation with LAC countries, China needs to pay attention to several factors. First, in order to avoid investment risks, both sides need to do a better job of policy consultation and cooperate in a transparent and sustainable manner that is committed to long-term engagement. Second, considering the diversity of the LAC countries and different approaches to regional integration, China needs to continue to mix its bilateral and multilateral approaches to address this diversity. Third, in order to reach real development cooperation, China should encourage and support the potential partner’s domestic debate on issues and policies regarding cooperation with China. Finally, China’s engagements with Latin America should continue to build a comprehensive and sustainable development partnership. Both sides should work together to safeguard an open world economy in an era full of doubts about the benefits of globalization.

Aside from economic considerations, political interests are also playing an important role in China’s engagement with Latin America. China highly values Latin America’s overall importance in the international system. In 1988, Deng Xiaoping had the foresight to state that the 21^st century should be the century of both the Pacific and Latin America. As a rising global power, China needs support from more countries to make China’s rise acceptable and legitimate to the rest of the world. As both China and Latin America are developing, China thinks there are more common interests between the two than with established powers. China doesn’t look for allies with Latin American countries to challenge the current international order. What China expects from Latin America is political understanding of its domestic development approach and its international profile. Exchanging ideas on domestic governance has been an important aspect of cooperation, and it helps Latin American people better understand China’s political system rather than exporting it to Latin America. China also needs Latin American countries to understand its domestic and international agenda.

China’s historical relationship with Latin America has been deeply affected by the international environment. Clearly, whether China has a geopolitical strategy towards Latin America or not, global geopolitical situations—especially major power relations—have a structural impact on the China-Latin American relationship. To understand China’s current dynamic presence in Latin America, we need to understand how China perceives the current international system and how the system’s factors affect China’s projection in Latin America. In the first 15 years of this century, economic globalization, the rise of the global south including the emerging economies, and a pro-globalization G20 constituted a benign international environment for the China-Latin America relationship to blossom.

Under the George W. Bush and Obama administrations, the United States held an officially objective and inclusive attitude towards the deepening relationship between China and Latin America, which was quite helpful for the relationship. Though the region has been largely overlooked since the U.S. has been primarily focusing on the anti-terrorism agenda in Central Asia, the U.S. generally thought of China’s presence in the region as a natural result of its economic expansion rather than a security threat. China participated in the OAS and Inter-American Development Bank with the support of the U.S. The U.S. also held regular dialogues with senior Chinese officials on Latin American affairs to exchange their concerns and interests. When the United States formally abandoned its 190-year-old Monroe Doctrine in 2013 and made adjustments to its policy to Cuba, both China and Latin America welcomed this new posture of the U.S. towards the region. China also expressed its open and supportive attitude of cooperation with third parties in Latin America.

In this favorable international context, China’s approach to Latin America was supportive of economic globalization and international cooperation. Therefore, China’s presence in Latin America was not perceived as a threat to the region’s peace and prosperity. China’s growing ties with Latin America were built in this relatively peaceful environment and were based on a mutually beneficial economic logic from the beginning of the 21^st century. Different from East Asia’s competitive strategic environment, China’s economic engagement with Latin America was less affected by the geostrategic competition from the United States and its allies. Most Latin American countries were embracing globalization and building a diversified external relationship by looking for more international partners, including China. China also identified itself as a beneficiary of the current international system and followed a peaceful rise approach. Major international economic institutions also recognized that the robust growth in Latin America in the past decade was partially due to its connections to China.[5]

However, this optimistic atmosphere totally changed when the Trump administration adopted a new strategy towards both China and the LAC region. The “America First” doctrine distanced the U.S. from both China and Latin America by emphasizing trade protection and economic protective measures. Furthermore, the U.S. is holding an increasingly suspicious and unfriendly attitude towards China’s presence in Latin America by publicly criticizing China’s intention, practices and impacts in the region and persuading regional partners away from cooperation with China, especially on digital technologies. The U.S. rolled back many important and positive measures initiated by the Obama administration. It reversed the engagement with Cuba and reasserted the Monroe Doctrine, which caused a fundamental change to the geostrategic environment of the Western Hemisphere. This kind of strategic and policy-level change might affect the trilateral relationship among China, the U.S., and Latin America negatively in several aspects.

While there are many challenges with a shifted American approach, it is noteworthy that both China and Latin America share a goal of achieving autonomy in international affairs. It is in the interest of both Latin America and China to pursue autonomy by building diversified international partnerships. China has increasingly presented itself as a full-fledged global player, which is naturally reflected in the comprehensive agenda of the Sino-Latin American relationship. China’s presence in Latin America will definitely create some geopolitical implications for the region even if it might not be China’s original intention. A strong and sustainable China and Latin America relationship serves to create the strategic international space that enhances their domestic development.

A good, stable, and rule-based China-U.S. economic relationship will be important for Latin American economies. Though countries such as Brazil and Argentina might benefit from the trade disputes between the United States and China in the short term, the uncertainties and the possible trade deal’s impact are worrisome for the region’s policymakers and private sector. A trade deal between China and the U.S. might reduce China’s import of energy and agriculture products from Latin America. The deal’s impact on the role and rules of the WTO is still unclear. As the weaker and vulnerable part of the world economy, developing economies including China and Latin America are more dependent on WTO regulations and rulings.

To ensure a sustainable China-Latin America relationship, it is also important to avoid strategic rivalries between China and the United States in Latin America. From a geostrategic point of view, an accommodative United States will offer more space for China and Latin America countries to engage with each other. In a highly integrated world, most countries in Latin America prefer to have good relations with both major world economies rather than take sides between China and the United States. In a larger context, it is a game of managing balance-of-power shifts in the region considering the rising autonomy of the region and more capable external and internal players emerging in the region. Considering the issues in the U.S.-Latin American relationship, China’s economic engagement with the region could provide more favorable conditions to solve the issues of illegal immigration, drug trafficking and energy security. It takes time for all relevant stakeholders to build a mutually beneficial trilateral relationship among China, the U.S., and LAC.

China’s approach to Latin America will continue in its pragmatic way with its preference for national interests rather than ideology. Latin America is a region full of market economies and democracies that was highly influenced by Western culture and values. China respects these institutional and cultural choices of Latin America when it seeks to deepen its relationship with the region. China still holds a neutral approach to engage with Latin American countries regardless of their ideological differences. China’s strategic partnerships in Latin America are based on partners’ development potential, regional influence, and global capacity rather than their political types or anti-U.S. attitude. By respecting national interests, China’s relationship with those countries represents a huge shift in leadership. What China looks for in Latin America is international cooperation, mutual respect and common development. Thus, it is highly possible for China to keep a politically neutral attitude to regional affairs in Latin America.

Bibliography

De la Torre, etc., “Latin America and the Rising South: Changing World, Changing Priorities,” Overview booklet, World Bank, 2015.

Enrique Dussel Peters, “China’s Evolving Role in Latin America: Can It Be a Win-Win?” Atlantic Council Report, September 2015.

Evan Ellis, US National Security Implications of Chinese Involvement in Latin America, Army War college Strategic Studies Institute, 2005.

Jiang Shixue, “New Development of China-Latin America Relations,” China Quarterly of International Strategic Studies, Vol. 1, No. 1, 2015, pp. 149-153.

Jiemian Yang ed., China’s Diplomacy: Theory and Practice, NJ: World Century Publishing Corporation, 2014, pp. 415-476.

Jorge Guajardo, Manuel Molano, and Dante Sica, Industrial Development in Latin America: What is China’s Role? Washington DC: Atlantic Council, 2016.

Margaret Myers and Kevin P. Gallagher, “Cautious Capital: Chinese Development Finance in LAC, 2018,” China-Latin America Report, February 2019.

Mario Esteban ( coord.), “China in Latin America: Repercussions for Spain”, in Real Instituto Elcano Working Paper, No.3, October 2015.

Mercedes Garcia-Escribano, Carlos Goes, and Izabela Karpowicz, “Filling the Gap: Infrastructure Investment in Brazil,” IMF Working Paper, WP/15/180, July 2015.

National Security Strategy of the United States of America, December 2017.

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Peter Hakim, “Is Washington Losing Latin America?” Foreign Affairs, Vol. 85, No. 1, 2006.

Riordan Roett and Guadalupe Paz, eds., China’s Expansion into the Western Hemisphere, Brookings Institution Press, 2008.

Ted Piccone, “The Geopolitics of China’s Rise in Latin America,” Geoeconomics and The World Bank, Latin America and the Caribbean’s Long-Term Growth: Made in China? Washington, D.C.: The World Bank/LAC, 2011.

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WU, Baiyi, Opportunities Along with Transformation: A Multi-Perspective Analysis of the China-Latin American Relations, Economy and Management Publishing House, 2013

[1] Margaret Myers and Kevin P. Gallagher, “Cautious Capital: Chinese Development Finance in LAC, 2018,” China-Latin America Report, February 2019. https://www.thedialogue.org/wp-content/uploads/2019/02/Chinese-Finance-in-LAC-2018-2.pdf.

[2] 百度百科词条：“托雷翁惨案”，https://baike.baidu.com/item/%E6%89%98%E9%9B%B7%E7%BF%81%E6%83%A8%E6%A1%88/9112881?fr=aladdin&ivk_sa=1022817p.

[3] XIANG, Lanxin, “An Alternative Chinese View”, in Riordan Roett and Guadalupe Paz, eds., China’s Expansion into the Western Hemisphere, Brookings Institution Press, 2008.

[4] OECD, UN, CAF, Latin American Economic Outlook 2016: Towards a New Partnership with China，2015. http://www.oecd.org/dev/Overview_%20LEO2016_Chinese.pdf.

[5]                 The World Bank (2011), Latin America and the Caribbean’s Long-Term Growth: Made in China? Washington, D.C.: The World Bank/LAC.

The post Building Development Partnership: Engagement between China and Latin America appeared first on China Research Center.

Over the past two years, U.S. officials have frequently pointed out China’s negative effects on the Latin American and Caribbean (LAC) region’s development and stability. U.S. Secretary of State Mike Pompeo typified this approach when he said during a trip to Mexico City in October 2018, “China has invested in ways that have left countries worse off” (Jourdan, 2019).

China’s effects on regional development are decidedly mixed. China’s contributions to the region’s economic growth are well-documented: China is LAC’s second-most important trading partner, second-most important source of M&A FDI, and top source of development finance. Nonetheless, Chinese demand for raw materials has accentuated regional dependence on commodities, in a process of “re-primarization” in South American economies, with troubling implications for the region’s long-term development prospects. Chinese investments have transformed the energy sectors in some countries, but the environmental effects of hydroelectric and other projects will be long-lasting in certain cases.

To achieve a wide range of development objectives — economic, environmental, and social — LAC must depend on increasingly well-planned and coordinated engagement from all of its major economic partners, including China. This is especially true in times of growing uncertainty, as the region grapples with humanitarian and migration crises, relentless corruption, and climate change, among other factors.

China’s Effect on Latin American Development

This report aims to qualify China’s effect on key development indicators in LAC, using the United Nations’ 17 Sustainable Development Goals (SDGs) as a basis for analysis. The sections below consider relationships around aid, finance, investment, and trade, in turn.

Chinese Aid to LAC

Chinese development assistance to LAC, including concessional finance, grants, technical assistance and aid, has undoubtedly affected development outcomes in the region, especially in targeted communities. Chinese disaster assistance was critical after the 2016 Ecuador earthquake, for example, and China-funded housing projects in Venezuela have enhanced the lives of their beneficiaries. Chinese technical assistance, including in agricultural technology and telecommunications, is rising in step with Chinese capacity in these sectors. A growing number of Chinese companies, including China National Petroleum Corporation (CNPC) in Peru and the Industrial and Commercial Bank of China (ICBC) in Argentina, provide occasional donations to local communities, such as CNPC’s “Sinfonías del Mar” music program for unprivileged students in Piura. Barbara Stallings (2017) estimates that from 2010 to 2012, LAC was somewhat over-represented among recipients of Chinese official development assistance (ODA) (Stallings, 2017). LAC accounted for 8.4 percent of Chinese ODA compared to seven percent of its trade and just 2.8 percent of its FDI. Considering the focused nature of Chinese aid on targeted communities, these efforts have supported decent work, quality education, and health and well-being SDGs (Goals 3, 4, and 8).

Chinese Finance in LAC

China has provided more than $141 billion in development finance commitments to LAC governments and state-owned firms since 2005, more than the World Bank, Inter-American Development Bank (IDB), or CAF — the Development Bank of Latin America (Gallagher and Myers, 2019). It has done so primarily through the China Development Bank (CDB) and the Export-Import Bank of China (China Exim Bank), two national development finance institutions (DFIs).

These two DFIs have financed highway, transportation, and renewable energy projects, as well as mega-dams in Ecuador (Coca-Codo Sinclair), Colombia (Ituango), and Argentina’s (Condor Cliff) mega-dam, as well as high-tension power lines associated with Brazil’s Belo Monte mega-dam (Gallagher and Myers, 2019). This trend will likely continue, as LAC nations join the Belt and Road Initiative, signaling their interest to work with China on finance and investment projects. To date, 14 Latin American and Caribbean countries have signed onto the initiative, including some of the region’s more prominent economies of Chile, Peru, Costa Rica, and Panama.

Despite some clear benefits of China-backed projects to the region, the U.S. has criticized China’s overseas finance, noting a Chinese tendency for “predatory economic practices” (Jourdan, 2018). Washington is especially focused on China’s role in Venezuela, where CDB and China Exim are thought to have enabled government-level mismanagement. In January, U.S. Secretary of State Pompeo accused China of “propping up a failed regime” there through “ill-considered investments” in the oil-rich nation (Gehrke, 2019).

U.S. concerns are sometimes warranted. The lack of transparency in Chinese state financing may facilitate corruption in certain countries. CDB and China Exim Bank have often extended finance though credit lines without publicly specified purposes, creating a transparency challenge for domestic constituencies.  For example, these arrangements have stoked allegations in Venezuela that the funds have disappeared, without benefitting the Venezuelan population. ¹

Concerns regarding debt sustainability of CDB and China Exim finance appear to be less well-founded. Despite its significant finance presence in the region, China has not had a serious impact on the region’s overall debt sustainability. If anything, China stands to lose money from Venezuela, the main LAC recipient of Chinese finance.  Analysts have predicted a default on Chinese oil-based payments as early as this year (Grisanti, and Lalaguna, 2018). More broadly, Ray and Wang (2019) show that even as Bolivia, Guyana, and Ecuador increased their Chinese debt between 2004 and 2016, their total external public and publicly guaranteed debt fell. In other words, Chinese credit substituted for traditional sources of credit, but each of these three countries ended the time period with less external debt than they had in 2004. Moreover, while aggressive creditor action gains more news coverage than debt forgiveness, China has shown itself willing to engage in debt restructuring many times recently.  Hurley, Morris, and Portelance (2018) document 84 cases of Chinese debt renegotiation, restructuring, or forgiveness since 2000. Kratz, Feng, and Wright (2019) calculate that this activity sums to approximately $50 billion in debt relief.

Finally, Chinese DFIs have exposed themselves to significant environmental and social risk in infrastructure finance in LAC. Like many national DFIs, CDB and China Exim Bank do not apply their own binding environmental and social standards when operating abroad. For example, the China-financed Rositas dam in southern Bolivia was recently suspended amid allegations of insufficient prior consultation with indigenous communities that would have been displaced for the dam (Hinojosa, 2018).  Colombia’s Ituango dam collapsed during construction, requiring the evacuation of downstream communities, though effective early-warning systems prevented casualties (Ray 2018). The Coca-Codo Sinclair dam project in Ecuador has been the subject of environmental, labor-related, and technical scrutiny. Furthermore, China’s deferential approach to environmental and social risk management has enabled Latin American governments to seek Chinese financing for higher-risk projects which, like the Rositas dam, did not attract financing from western DFIs (Ray, Gallagher, and Sanborn, 2018).

Overall, Chinese finance in LAC has facilitated regional transport and energy expansion, improving livelihoods and energy access (SDGs 7 and 8). But the extent to which these projects support local job creation (SDGs 1 and 8) and environmental sustainability (Goal 11) depends greatly on the contract negotiation and performance oversight by LAC governments, and it varies widely across the region.

China’s Investment Impact

Chinese foreign direct investment (FDI) has bolstered the LAC region, bringing much-needed capital and creating an estimated two million jobs (Salazar-Xirinachs, Dussel Peters, and Armony, 2018). However, as with any transition of this size, it has not always been a smooth process. Chinese investors are relative newcomers and have faced steep learning curves in adapting to local labor and cultural expectations, as in the cases of Shougang mining in Peru and Golden Dragon copper in Mexico (Sanborn and Chonn, 2017; Schatan and Piloyon, 2017). Despite considerable reference to environmental and ecological cooperation in China’s LAC policy, and China’s own progress in recent years on the environmental SDGs, Chinese engagement in LAC appears to continue to struggle with sustainability.

LAC’s environmental and social standards are among the most ambitious in the world, and Chinese investors have at times struggled to meet them, especially when enforcement has been lacking from LAC national governments, as in the case of Sinopec in Colombia (Rudas Lleras and Cabrera Leal, 2017). In other cases, Chinese investors have been willing to take on environmentally-risky projects proposed by LAC governments, even as signs of potential environmental conflict brew around them. For example, Sinohydro’s hidrovía amazónica commercial water investment project in Peru will reportedly alter the dynamics of the affected rivers and their capacity to sustain lakes in natural parks such as the Pacaya Samiria (DAR 2019).

For more than 20 years, the U.S. has expressed concern regarding the strategic impact of Chinese investment, including the prospect for Chinese dual (civilian-military) use of port and other investment projects in Latin America. Concerns surfaced in 1998 about Hong Kong firm Hutchinson Whampoa running ports on either end of the Panama Canal, for example (United States Senate, 1998). Chinese billionaire Wang Jing’s canal adventures in Nicaragua were also closely monitored in Washington starting in 2013. Attention has focused more recently on Chinese investment in a deep space monitoring facility in Neuquén, Argentina, and its implications for U.S. security (Londoño, 2018).

U.S. concerns have tangible implications for LAC countries, as regional governments are encouraged to avoid engagement with China in favor of partnership with traditional allies. There are indeed drawbacks associated with the Chinese model, including the negative impacts of insufficient due diligence in certain infrastructure investment projects. The Nicaragua Canal project, for example, has been all but abandoned facing widespread public protests and unforeseen financing difficulties. However, U.S. pressure to limit economic options and partnerships could have unfortunate consequences for the region’s overall economic growth.

The Trade Story

Latin America’s trade relationship with China has also grown precipitously in the last decade. Chinese demand now accounts for more than 10 percent of LAC exports, including over 15 percent of LAC agricultural exports and more than 25 percent of LAC extractive exports such as minerals and oil (Ray and Wang, 2019).  In fact, China’s soaring demand for these commodities was strong enough to drive a global rise in minerals prices (Roach, 2012; Streifel, n.d.), further boosting export revenue in minerals-exporting countries globally, including in LAC (Arezki and Matsumoto, 2015). Moreover, the rise of China as an export market represented significant geographic diversification of Latin America’s exports, cushioning the blow from the U.S. recession of 2008-2009 (Jenkins, 2010; Wise Armijo, and Katada, 2015; Pastor and Wise, 2015).

Nonetheless, China’s imbalanced demand for raw materials from Latin America, coupled with its own development into a powerhouse of manufactured exports, has contributed to a process of re-primarization of LAC economies: a retreat from industrialization and toward primary commodity production. The rise of China as a global trading giant has created “winners” and “losers” in LAC countries’ trade balances, based on whether each country’s export profile is complementary or competitive with China (Jenkins, Dussel Peters, and Mesquitia Moreira, 2008).  Those countries with histories of exporting mineral and agricultural goods — particularly in South America — have seen those sectors bolstered. Meanwhile, Mexico and Central America, whose exports include an important share of manufactured goods destined for the U.S. market, have struggled to maintain that market in the context of strong competition from Chinese manufactured goods (Gallagher and Porsecanski, 2011). However, imports of Chinese energy technology, especially in renewable energy, has allowed for the dramatic expansion of the solar power industry in Chile, as well as electric transportation throughout LAC (Borregard et al 2017; Bermúdez Liévano 2019).

Of course, the China-led expansion in LAC agro-industrial and extractive activity is not solely an economic phenomenon, but also an environmental and social one. The expansion of agro-industrial and extraction activities into areas previously occupied by peasant and forest communities has come at a cost to those same communities, which have often been displaced and dispossessed of the natural resources necessary for their livelihoods, as reflected in environmentally-based conflicts surrounding that expansion throughout LAC (Bebbington and Bury, 2013; Roberts, Thanos, and Helvarg, 2003; Edwards, Roberts, and  Lagos, 2015). More broadly, the expansion of these economic frontiers into tropical forests has brought an end to years of progress in reducing Amazonian deforestation, with important climate implications for the planet as a whole (Fuchs et al, 2019). Thus, the region’s boom in agricultural and extractive exports, fueled by demand from China, has come with significant economic, social, and environmental costs for rural communities in the region, as well as environmental costs for the planet.

The overall impact of the China-LAC trade boom has been decidedly mixed from the perspective of SDGs. Progress toward economic SDGs, including poverty and hunger reduction, employment and growth (Goals 1, 2, and 8), has been boosted significantly in “winning” countries in South America, but faced challenges in “losing” countries such as Mexico, as well as in pockets of negatively-impacted rural communities in South America. Progress on climate and local environmental justice goals (Goals 11, 13, and 15) has also been lopsided, advanced by Chinese renewable energy technology imports but weighted down by the expansion of carbon-intensive agricultural and extractive industries, which compete for access to natural resources with traditional communities.

Conclusion

Until at least the spring of 2019, U.S. government officials had articulated concerns about Chinese engagement with Latin America. Most recently, then-Assistant Secretary of State for Western Hemisphere,Kimberly Breier, made reference to the China-Latin America relationship in a April 26, 2019 speech at the Council of the Americas in Washington, D.C., noting China’s distorted market practices; the generational impact of 5G-related decision-making on national security, economy, and society; Chinese support for authoritarian regimes and surveillance states; and China’s responsibility for the worsening the crisis in Venezuela, among other issues (Breier, 2019). Breier added that while some Chinese projects are not “malign,” “a mere promise of ‘high-quality development’” was outweighed by a poor track record.

China’s messaging vis-à-vis Latin America, as articulated most recently in the Chinese Ministry of Foreign Affairs “2018 Policy Paper on Latin America and the Caribbean” and a handful of other commonly-referenced proposals, such as the “1+3+6 Cooperation Framework” portrays a decidedly different perspective. It describes a partnership supportive of common development objectives and shared global interest, including climate change mitigation and upgrading global economic governance.

In practice, Chinese activity in LAC has had varied effects on the region’s development prospects. Chinese engagement appears to at least partially support several SDGs, including those related to employment, poverty, and economic growth. However, trade patterns between China and LAC have reinforced LAC’s traditional focus on commodities exports, and China’s investments in infrastructure and extractives raise environmental and social risks.

China nonetheless appeals to the region on the basis of equal partnership, south-south goodwill, and support for alternative development paths suited to countries’ “own conditions.” Some in LAC share U.S. skepticism of China’s intentions in the region, but the prospect for collaborative partnership with a fellow developing nation remains attractive to many others. Sustained interest in partnership with China, along with regional demand for Chinese investment and trade, will ensure stronger relations in the years to come. China would also appear fully committed to continued engagement, having recently extended the BRI to Latin America.

With China very much in the region to stay, LAC’s development outcomes are best supported by engagement from a range of partners, and growing commitment from both regional governments and external actors to sustainable, long-term development initiatives. Collaboration on areas of shared interest, whether by the U.S., China, and LAC, or by LAC governments and other partners nations, will help to promote positive development outcomes while reducing negative ones.

For example, East-West collaboration on aid efforts can take advantage of existing complementarities. Chinese and U.S. disaster responses and readiness exercises already resemble each other and could benefit from greater coordination.  The November 2010 China-Peru bilateral medical exercise Angel de Paz resembled U.S. Southern Command-led joint exercises, and the Chinese “Peace Ark” hospital ship and the USNS Comfort pursue parallel operations (Ellis, 2017). In the long term, it would be beneficial to avoid unproductive duplication and build long-term ties among agencies operating in the same aid arenas.

LAC’s environment ministries already support each other through the Red Latinoamericana de Fiscalización y Cumplimiento Ambiental (REDLAFICA), and the United States’ Environmental Protection Agency’s cooperates with REDLAFICA, organizing workshops on combatting environmental crimes like the illegal logging that has driven conflict throughout the Amazon basin. For its part, China has a history of collaborating with peers through the China Council for International Cooperation on Environment and Development (CCICED) but has not worked closely with REDLAFICA. Bridging this gap can help ensure that collaborating toward shared goals of sustainable development through LAC’s “China boom.”

Finally, DFIs also have an important role in cultivating greater joint progress toward shared goals. Collaboration between Chinese and western DFIs can pair Chinese DFIs’ size and flexibility with the local experience, access, and technical abilities of western institutions. As Ma, Studart, and Vasa (forthcoming 2020) explain in detail, each of these types of actors has complementary institutional strengths, all of which are needed for the development of climate-savvy, socially-inclusive infrastructure.  Chinese DFIs offer competitive capital costs and sizable financial resources, along with a wealth of technical expertise in the design and implementation of infrastructure projects. Western MDBs also have abundant access to capital, as both the World Bank and IDB have AAA bond ratings. What CAF is lacking in this regard it partially offsets through its perfect history of borrower repayment, emphasizing its excellent relationships with regional governments (Ray and Kamal, 2019). Finally, LAC NDBs have unique vantage points for identifying and cultivating feasible and sustainable projects. By working together to identify, finance, and oversee the next generation of LAC infrastructure, these various types of DFIs can help ensure that these projects facilitate LAC’s progress toward the Sustainable Development Goals.

References

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Edwards, Guy; J. Timmons Roberts and Ricardo Lagos. 2015. A Fragmented Continent: Latin America and the Global Politics of Climate Change. MIT Press.

Fuchs, Richard, Peter Alexander, Calum Brown, Frances Cossar, Roslyn C. Henry, and Mark Rounsevell. 2019, “Why the US–China trade war spells disaster for the Amazon.” Nature, 27 March. Accessed 17 October from https://www.nature.com/articles/d41586-019-00896-2.

Gallagher, Kevin P. and Margaret Myers. 2019. “China-Latin America Finance Database,” Washington, DC: Inter-American Dialogue. https://www.thedialogue.org/map_list/.

Gallagher, Kevin P. and Roberto Porzecanski. 2011. The Dragon in the Room: China and the Future of Latin American Industrialization. Stanford University Press.

Gehrke, Joel. 2019. “Pompeo denounces Russia, China over support for Venezuela’s Maduro.” Washington Examiner. Accessed 1 May 2019 from https://www.washingtonexaminer.com/policy/defense-national-security/pompeo-denounces-russia-china-over-support-for-venezuelas-maduro.

Grisanti, Alejandro and Gorka Lalaguna, 2018. “El arte de la deuda: China, más cerca del default que de nuevo financiamiento.” Prodavinci. Accessed 1 May 2019 from https://prodavinci.com/el-arte-de-la-deuda-china-mas-cerca-del-default-que-de-nuevo-financiamiento/.

Hinojosa, Josué. 2018. “ENDE suspende proyecto Rositas por el rechazo de las comunidades.” Los Tiempos, 4 October. http://www.lostiempos.com/actualidad/economia/20181004/ende-suspende-proyecto-rositas-rechazo-comunidades.

Hurley, John, Scott Morris, and Gailyn Portelance, “Examining the Debt Implications of the Belt and Road Initiative from a Policy Perspective,” Center for Global Development: Washington, DC (2018). https://www.cgdev.org/sites/default/files/examining-debt-implications-belt-and-road-initiative-policy-perspective.pdf.

Jenkins, Rhys, “China’s Global Expansion and Latin America,” Journal of Latin American Studies 42 (2010): 809-837.  https://doi.org/10.1017/S0022216X10001379.

Jenkins, Rhys, Enrique Dussel Peters, and Mauricio Mesquita Moreira. 2008. “The Impact of China on Latin America and the Caribbean.” World Development 36:2 (February), 235-253. https://doi.org/10.1016/j.worlddev.2007.06.012.

Jourdan, Adam. 2018 “China denounces Pompeo’s ‘malicious’ Latam comments amid influence battle.” Reuters. Retreived 1 May 2019 from https://www.reuters.com/article/us-usa-trade-china-latam/china-slams-pompeos-malicious-latam-comments-amid-influence-battle-idUSKCN1MW03Q.

Londoño, Ernesto. 2018. “From a Space Station in Argentina, China Expands Its Reach in Latin America.” New York Times, 28 July. Retrieved October 14, 2019 from  https://www.nytimes.com/2018/07/28/world/americas/china-latin-america.html

Ma, Xinyue, Rogerio Studart, and Alexander Vasa. Forthcoming 2019. “Cooperation between Development Finance Institutions in China and Latin America and the Caribbean: Triangular Green Finance Cooperation – Evolving Lessons from Cooperation Models.” Boston: Boston University Global Development Policy Center.

Myers, Margaret and Kevin Gallagher, “Cautious Capital: Chinese Development Finance in LAC, 2018,” Inter-American Dialogue: Washington, DC (2018).

Pastor, Manuel and Carol Wise. “Good-bye Financial Crash, Hello Financial Eclecticism: Latin American Responses to the 2008–09 Global Financial Crisis,” Journal of International Money and Finance, vol. 52 (April 2015), pp. 200–217.

Ray, Rebecca and Rohini Kamal. 2019. “Can South–South Cooperation Compete? The Development Bank of Latin America and the Islamic Development Bank.” Development and Change 50:1 (January), 191-220. https://doi.org/10.1111/dech.12468.

Ray, Rebecca, Kevin P. Gallagher, and Cynthia Sanborn. 2018. “Standardizing Sustainable Development? Development Banks in the Andean Amazon.” Boston: Boston University Global Development Policy Center. https://www.bu.edu/gdp/files/2018/04/Development-Banks-in-the-Andean-Amazon.pdf.

Ray, Rebecca, Kevin Gallagher, Andrés López, and Cynthia Sanborn. 2017. China and Sustainable Development in Latin America: The Social and Environmental Dimension. Anthem Press.

Ray, Rebecca. 2017. “The Panda’s Pawprint: The Environmental Impact of the China-led Re-primarization in Latin America and the Caribbean.” Ecological Economics 134 (April), 150-159. https://doi.org/10.1016/j.ecolecon.2016.12.005.

Ray, Rebecca. 2018. “Colombia Megadam Collapse Highlights Need for Comprehensive Standards.” Diálago Chino, 12 July. https://dialogochino.net/11354-colombia-megadam-collapse-highlights-need-for-comprehensive-standards/.

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Penelope B. Prime, Georgia State University

U.S. President Donald Trump signed a trade deal with China on Jan. 15 intended as a first phase toward a more comprehensive agreement between the two countries.

In exchange for some tariff relief, China promised to buy an additional US$200 billion in American goods and services over the next two years and make structural reforms that would provide more protection for U.S. intellectual property. It still leaves about $360 billion in punitive tariffs on Chinese imports in place – and more sanctions would be triggered if China fails to meet the terms of the deal.

Good news, right? The end of the trade war is nigh? Don’t get your hopes up.

While business leaders in both countries will be temporarily relieved, the underlying tensions between them will not end easily.

As an economist who closely studies the U.S. relationship with China, I believe there are fundamental issues that won’t be resolved anytime soon.

Doing it in phases

Tariffs and other trade issues have received most of the attention during the trade war, but the more fundamental – and difficult – challenges are with lax intellectual property protection and China’s industrial policy.

The U.S. is unhappy with China’s use of these tools to develop its economy and to help its companies compete – unfairly, from the U.S. perspective. And many of the Trump administration’s demands challenge China’s normal business and policy practices.

China’s leaders can’t be seen by Chinese citizens as giving into the U.S., while Trump wants to show that he is tough on China as part his campaign for reelection. This makes the negotiations very sensitive on both sides.

That’s why American and Chinese negotiators, who have been engaged in talks for almost two years, decided to try to get to an agreement in phases.

Phase one has focused on the trade balance and tariffs, with some provisions relating to technology transfer, intellectual property and opening China’s economy to foreign business. Phase two is expected to then deal more deeply with intellectual property enforcement and economic reform in China.

Given the negotiations went on for so long, it’s fair to ask, why are these issues so difficult to resolve? I believe there are basically three factors that have made finding much common ground difficult – and phase one won’t change that.

Government subsidies

First, China’s successful growth has combined market competition with government-led industrial policy. For example, when China’s leaders decided the economy needed more innovation, it created incentives and targets for companies and research institutes to create patents. The number of patents filed has soared as a result.

A wide range of government subsidies is used to direct and assist private as well as state investment in similar ways.

The U.S. does this as well but not on the same scale, and therefore views it as unfair.

From China’s perspective, however, it is not reasonable for the U.S. to require China to change its development model in exchange for removing tariffs.

Protecting intellectual property

Getting China to do more to protect the intellectual property of advanced technologies is another especially thorny issue.

Both countries are facing economic challenges that can be aided by improved technology. But since in many areas Chinese capabilities have caught up with those of the U.S., or are being rapidly developed, there is much more pressure from the U.S. for China to accept global norms on intellectual property rights.

Even while China’s own IP protections have improved at home, there is ample evidence that Chinese companies have copied foreign technology without permission or payment, despite China’s acceptance of IP protection as part of World Trade Organization membership.

Foreign companies also report being compelled to share advanced technology in order to do business in China. While, technically, the companies can decide to pull out of China’s market, the U.S. argues that this hurts the competitiveness of U.S. businesses. It either means they must lose their technological advantage or not have access to the business opportunities that China’s large market offers. There is no reciprocal requirement of Chinese companies doing business in the U.S.

The phase one agreement begins to deal with the IP issues and includes a complaint process, which is a step in the right direction. It remains to be seen, however, how extensive it will be and how quickly it’ll be implemented given that Chinese companies will still face intense pressure from the government to advance China’s domestic capabilities.

Military concerns

Finally, technology capabilities are related to growing military concerns.

Many of the advanced technologies that China is racing to obtain have military as well as civilian uses. U.S. policy under the current administration has indicated a wariness about China’s military intentions and is considering options.

This wariness has been bolstered by China’s military buildup, especially naval capabilities in Asia. Some advisers to the Trump administration argue that China’s ultimate long-term goal is to replace the U.S. as the dominant global power.

China’s rise

Conflicting differences in the U.S. and China’s economic systems were less of a problem so long as Chinese companies lagged far behind their American counterparts in terms of technology and competitiveness.

As China has grown more technologically advanced, its relationship with the U.S. has become increasingly strained. This will only get worse as China’s economy develops and its companies compete more with the U.S. and others.

The phase one agreement represents an important step in re-setting the dialogue between the two countries in a positive direction. Whether we see a phase two will depend on open discussion and trust.

Good relations with the U.S. have been one of the foundations of China’s successful development and entry into global markets. Chinese leaders are now weighing how much these good relations with the U.S. matter to their future.

This is an updated version of an article originally published on Dec. 13, 2019.

Penelope B. Prime, Clinical Professor of International Business, Georgia State University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Over the past decade, governments around the world have begun adopting policies that make data they collect openly available to all users at no cost — notably information from Earth observation satellites.¹ Satellites collect environmental data on a global scale, and the data are directly relevant to understanding and addressing a wide range of global and local challenges.

China, which launched its first Earth observation satellite in 1988, has long been involved in global discussions regarding open access to satellite data and has made a large portion of its data available in line with global norms. Recently, China has announced a number of policies to further increase the availability of its Earth observing satellite data, in line with its Digital Belt and Road (DBAR) initiative. China also seeks to lead in the transition to big data and cloud computing infrastructures that facilitate sharing. This article provides an overview of Chinese Earth observation activities, data sharing policies, and open data initiatives, and discusses potential future developments in this area.

Satellite Earth Observations in China

China’s civilian Earth observation satellite efforts are divided into five programs:

1. Fengyun meteorological satellites
2. China-Brazil Earth Resources Satellite program and Ziyuan resource satellites
3. HaiYang ocean satellites
4. Haunjing environmental and disaster monitoring satellites
5. Gaofen high-resolution imagery satellites. Each of these programs is run by a different organization, and the satellite data have been subject to different data sharing policies.

The Fengyun satellites are operated by the National Satellite Meteorological Center, a unit of  the Chinese Meteorological Administration. The Center was established in 1970, and the first satellite in the series was launched in 1988, operating in low Earth orbit and collecting data on a global scale. In 1997, China launched its first geostationary meteorological satellite, which provides coverage of China and the surrounding region. After launching multiple satellites in these first series, in 2008 China started placing its second-generation meteorological satellite series into orbit. These satellites feature capabilities similar to those of the U.S. and European meteorological satellites.²

From the beginning of its program, China made its data freely available to other nations in keeping with international norms and coordinated its activities with the World Meteorological Organization. Today, in addition to direct broadcast links, current and archived data can be freely accessed online. China also offers special capabilities to Belt and Road partner countries, allowing them to request dedicated observation services in the case of disasters, such as typhoons, sandstorms, or forest fires.³

China’s resource satellites, developed by the Chinese Academy of Space Technology, are operated by the Ministry of Natural Resources (originally the National Administration of Surveying, Mapping and Geoinformation).⁴ The first of these satellites was the China Brazil Earth Resource Satellite 1 (CBERS-1) in 1999. Additional satellites in the series were launched in 2003, 2007, and 2014. CBERS was a joint project between China and Brazil, developed in response to the increasing costs of satellite remote sensing data in the international market.⁵ Although the initial plan was to sell CBERS data on the international market, Brazil and China later chose to provide free access to the data. Data were made available free of charge to Brazilian users in 2004. In 2007, free access was expanded to include African users, and in 2010, the data were made freely available to anyone in the world under an open data policy.⁶

In 2011, China launched the first civilian Ziyuan resource satellite, followed by another in 2012, and a third in 2016. The data from these satellites are primarily used for domestic surveying and mapping. After ZY-3 was launched in 2016, the Satellite Surveying and Mapping Application Center of China’s National Administration of Surveying Mapping and Geo-information (later replaced by the Ministry of Natural Resources) made data available on a cloud service platform. Data could be accessed for free by non-profit organizations and domestic educational institutions. Fees were charged for commercial and private access. China also pursued bilateral and multilateral data sharing agreements.⁷ As of 2018, China had signed agreements to allow data sharing with 20 countries and was looking to expand these partnerships.⁸

The Ministry of Natural Resources houses the National Satellite Oceanic Application Service, which is responsible for the HaiYang ocean satellite series. The first HY satellite was launched in 2002, followed by additional launches in 2007 and 2011. These satellites were designed to help manage China’s marine resources and protect China’s marine rights and interests.⁹ Data from the HY satellites are available to international users through a tiered system. Researchers or non-commercial organizations that require archived data can fill out a request form online. Organizations that wish to receive large volumes of data in near-real time must pursue a memorandum of understanding or contract the Service. Data on China’s exclusive economic zone and sensitive regions are not included in the releases, and data that are provided may not be used for military or commercial purposes.¹⁰

China launched two Haunjing environment and disaster reduction satellites in 2008. These imaging satellites were joined by a synthetic aperture radar satellite in 2012, providing the ability to make observations regardless of lighting and weather conditions.¹¹ The Ministry for Ecology and Environment is the primary user of the satellites and is responsible for development of satellite data applications.¹²

In 2011, China announced plans to develop the civilian China High-resolution Earth Observation System (CHEOS). Together with existing satellite systems, CHEOS aimed to provide China with all-weather, 24-hour global Earth observation capabilities.¹³ The first Gaofen (GF) satellite was launched in 2013, and 13 additional satellites had been launched by November 2019.¹⁴ For a number of years, China shared data from the GF satellites on an ad hoc basis with selected partners or to support natural disaster recovery efforts. In November 2019, China announced that it would make 16-meter resolution imagery from GF-1 and GF-6 satellites openly available to users around the world. Ms. Wenbo Zhao, Deputy Director of Earth Observation System and Data Centre, China National Space Administration, stated that China had “just started the journey of open data,” suggesting more steps in this direction may come in the future.¹⁵

Earth Observations in Regional and Global Initiatives

Although China’s Earth observation satellite programs focus on different application areas and are operated by a variety of agencies, there has been an effort to also consider their potential benefits as a whole, both for domestic applications and for strategic value. In 1999, China initiated the first International Symposium on Digital Earth, bringing together 500 delegates from China and abroad. The resulting Beijing Declaration on Digital Earth identified the importance of integrated Earth observations for addressing major global challenges, such as environmental degradation and natural resource depletion.¹⁶

In 2007, China formed the Center for Earth Observation and Digital Earth within the Chinese Academy of Sciences. The organization focused on exploration of cutting-edge Earth observation technologies and applications.¹⁷ In 2011, the Center announced the Earth Observation Data Sharing Project, which would make data from international Earth observation satellites, such as the U.S. Landsat system, openly available to domestic Chinese users. Leaders identified data sharing as a necessary and important component of promoting innovation in environmental sciences.¹⁸

Three years after Xi Jinping announced the Belt and Road Initiative to provide $1 trillion of investment in more than 60 countries, the Chinese Academy of Science initiated the Digital Belt and Road Program. The aim of the program is to improve environmental monitoring, promote data sharing, and support policymaking using big data on Earth observations. The program involves more than making Chinese data available to others; it also aims to address the digital divide, raise awareness of the potential benefits of Earth observations, and increase international collaboration.¹⁹

In response to the rapidly growing volume of Earth observation data, the Chinese Academy of Sciences launched its Big Earth Data Science Engineering (CASEarth) program in 2018. CASEarth aims to establish an international center for big data and Earth science. It includes the development of an advanced cloud service platform to enable data access and analysis. It is expected to incorporate the Digital Earth Science Platform to provide information and visualizations to aid decision-making. It will also provide capabilities to promote sustainable development in support of the Belt and Road Initiative. CASEarth is expected to “break through the bottleneck of open data and data sharing” and produce a platform “with global influence.”²⁰

China has already put an emphasis on using Earth observation satellite data to contribute to major international efforts. China became a member of the Group on Earth observations in 2009, participating in international meetings to identify opportunities for international collaboration. China has used satellite data to monitor climate change, in support of the Paris Climate Agreement. In support of the Sendai Framework for Disaster Risk Reduction, China distributes satellite data to enable disaster response. China also completed the world’s first comprehensive measurement of progress toward the United Nations Sustainable Development Goals by combining Earth observations with statistical data.²¹

China’s efforts to leverage open data sharing with respect to Earth observation satellite data fit within a broader move toward open data sharing. The Chinese Ministry of Science and Technology launched the Scientific Data Sharing Program in 2002, to make scientific data collected by national research projects more accessible in order to promote scientific and technical innovation.²²

In September 2019, the International Science Council Committee on Data, with support from Chinese Academy of Sciences, organized the International Workshop on Open Research Data Policy and Practice in Beijing. At the conclusion of the workshop, attendees released the Beijing Declaration on Research Data, which called for global cooperation in making public research data as open as possible on a global basis.²³

Conclusion

Over the last 30 years, China has developed a large and advanced Earth observation satellite program capable of collecting high-quality data for a wide variety of applications. While many of these programs have involved international collaboration and data sharing from early in their development, in recent years there has been a concerted effort to leverage China’s advanced capabilities on the global stage.

This is seen in the large-scale efforts to open access to Earth observation data and to develop platforms open to a wide range of users. China is using its Earth observation data to contribute to major international efforts, increasing its stature and role in these efforts, and setting precedents with regard to how data may be used. Data sharing is directly contributing to its Belt and Road Initiative, strengthening ties with other nations in the region.

Open data efforts in other nations have demonstrated that open access to scientific data has significant benefits, enhancing scientific research and development of new applications. As China continues to increase the amount of data made openly available on the global level, its significant investments in data collection systems – including expensive Earth observation satellite systems – should generate social benefits on a global scale.

References

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To consider these and many other questions about China, the Qatari-based Al Jazeera Network spent months in a number of countries interviewing scholars, practitioners, and commentators. In the end, AJE produced a 90-minute documentary titled “The China Complex” as part of the network’s signature TV documentary series “The Big Picture.”

Professor Fei-ling Wang of Georgia Institute of Technology, a China Research Center associate, was one of the scholars who appears prominently in the film. In addition to being interviewed, he took part in roundtable debate in AJE’s London studio, portions of which are featured extensively in the documentary. 

The film was broadcast in over 130 countries in December 2019 and it now available online in two episodes:

Part I:

Part II:

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School in Beijing was shock therapy.

My formerly clueless child quickly grasped the meaning of grades and all that implies. First, students are graded all the time. There is hardly any ungraded work (and there are tons of daily homework assignments and frequent exams). In fact, there is an obsession with quantifiable assessment on performance that reaches every position and worker throughout Chinese society (more on that later). My kid knows that every day a “showdown” time will come when she finds out how well she did in her homework or exam.

Second, these are not “soft” grades that give everyone credit for effort. Chinese schools don’t do a lot of sugarcoating.  I find that refreshing most of the time, but horrifying on some occasions. If your answer deserves only a 59, you should not expect an automatic round up to 60. As a college professor in the U.S., I often feel the pressure of arguing a case in front of the Supreme Court for giving a bad grade to a student.

Third, students’ grades are essentially public knowledge among their classmates. I vividly remember one of my own Chinese teachers when I was a child used to give back the exams in descending order of the grades, so the entire class recognized the “best” and the “worst” instantly. I feel bad that my child was subject to the same practice decades later. She came back one day quite upset because one of her classmates (who was put in charge of returning exams!) taunted her for scoring the lowest grade in her class (77 out of 100). Holding back my anger and sadness, I asked her how she handled this. It turned out that my feisty girl said to the boy: “Well, I know you got only 73 a couple of weeks ago on a different exam!” Then she reported his “bullying” to the teacher.

As unhealthy and appalling as this sounds, I noticed that these sorts of incidents became a source of motivation for my daughter. The open knowledge of grades brews fierce competition. Somehow the seeds of wishing to score the absolute best (100!) were planted and she did succeed in obtaining that elusive 100 on her last exam before leaving China. I am glad and proud about how she reacted to this “negative” event, and on some level attributes the competitive environment with lighting a desire for self-improvement, although the public knowledge of grades must also discourage and “damage” many children.

When I was a child, a popular idiom among my classmates was “KaoKaoKao, Laoshi de Fabao; FenFenFen, Xuesheng de Minggen,” which translates to “Test, Test, Test, a teacher’s magical weapon. Grade, Grade, Grade, a student’s lifeline.” I find it still holds universal truth in China today.

Competition is always high among Chinese students due to the scarcity of good schools compared to the large number of students. Getting into a GOOD middle school, then a GOOD high school, a GOOD college, and ultimately securing a GOOD job gets progressively more difficult as one climbs the social pyramid. The competitive environment in Chinese schools mirrors that in the society, where most of the competition boils down to the quantifiable evaluation I referred above.

On most campuses in the U.S., the “tough love” approach is not a popular or well-regarded way of teaching and interacting with students. Sometimes I wonder whether we are sheltering them for too long from the real world, where effort is important but performance is the key to success. Compared to our American students, their Chinese peers are confronted at a much younger age with real competition that translates to real consequences. Small children recognize that the grades correlate with respect, social standing, teachers’ favor, and parents’ approval. For older kids, this converts to chances of advancing to the next level of school and college, which ultimately links to income and social status as adults.

My daughter returned to her American elementary school with newfound enthusiasm and appreciation. Part of me was relieved, but part of me missed that striving energy I saw in her back at the Chinese elementary school. I still don’t know how much competition and objective testing is healthy for young children. However, many Chinese children (and grown-ups) I encountered had that spirit of striving for self-improvement and held the belief that one could make a better life for themselves through hard work. That dream can be realized only if the playing field is level, the competition fair, and the rules transparent. And both China and the U.S. still have a lot work to do on that.

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